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A Comprehensive Socio-Economic Model of the Experience Economy: the Territorial Stage

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A Comprehensive Socio-Economic Model of the Experience Economy: the Territorial Stage WORKING PAPER 9 – 2014/E THE CIRCULATION OF WEALTH A COMPREHENSIVE SOCIO-ECONOMIC MODEL OF THE EXPERIENCE ECONOMY: THE TERRITORIAL STAGE Guex Delphine and Olivier Crevoisier Authors Guex Delphine and Olivier Crevoisier Delphine Guex is a PhD student at the University of Neuchâtel, at the Institute of Sociology, and Member of the Research Group on Territorial Economy (GRET). Her research interests: tourism, his- tory, economic sociology of communication, cultural resources, presential economy. [email protected] Olivier Crevoisier is Professor of Territorial Economy at the Institute of Sociology and Director of the Research Group on Territorial Economy (GRET) at the University of Neuchâtel. He is also a mem- ber of the European Research Group on Innovative Milieux (GREMI). Research interests: innovative milieus, finance industry and cultural resources. [email protected] © 2014 by the authors ISSN : 1662-744X La reproduction, transmission ou traduction de tout ou partie de cette publication est autorisée pour des activités à but non lucratif ou pour l’enseignement et la recherche. Dans les autres cas, la permission de la MAPS est requise. Contact : MAPS - Maison d’analyse des processus sociaux Faubourg de l’Hôpital 27 CH - 2000 Neuchâtel Tél. +41 32 718 39 34 www2.unine.ch/maps [email protected] Abstract This paper deals with the economic dimension of the experience economy, i.e. how economic value is created between customers and producers and is articulated to monetary transactions. After discussing the Pine & Gilmore’s metaphor of stage and concept of admission fees, we propose the model of the Territorial Stage constituted by two elements. First, the Territorial Stage depends on the accumulation of transactions along history (complex process in time and space). Second, the accumulation of the transactions constitutes the territorial stage under a concrete dimension (arrangement, spatial organization, activities, etc.) and a symbolic dimension (image, reputation, level of range and price). From this core concept, we then suggest an operational typology of Territorial Economic Transactions (TETs) to analyse the history of Swiss tourism resorts. Indeed, tourism resorts are good examples of the fact that value, in the experience economy, is not produced at the scale of a business but beyond companies. Conclusions suggest that today’s development of the EE is the result of a double movement of ‘touristification’. First, the mobility of people increases and opens infinite possibilities to develop presential transactions. Second, traditional goods are more and more transformed into goods enriched by symbolic territorial meanings. Key words : Experience economy Staging Transaction Tourism Mobility 3 INTRODUCTION This paper1 deals with the economic dimension of the experience economy (EE) that is to say with how economic value is created between customers and producers and is articulated to monetary transactions. It considers that space and time are consubstantial for these two problems. ‘Work is theatre and every business is a stage.’ We do not agree with this catch phrase of Pine & Gilmore (1999). Tourism resorts are good examples of the fact that value, in the experience economy, is not produced at the scale of a business (or only in some circumstances like Disneyland) but beyond companies. Monetary transactions, contrarily, operate at the scale of companies and customers. Value creation and monetary transactions, while being profoundly intertwined, are distinct phenomena. Therefore, the second metaphor of Pine and Gilmore, the admission fee to charge customers, does not solve the problem of how the created economic value is articulated with monetary charges either: experiential transactions do not occur in clubs - or only a few of them! Consequently, what is the space-time entity which is relevant in order to capture on the one hand, economic value creation for the customer and on the other hand the monetary transaction in favour of the producer in experiential economic transactions? A second question deals with how the qualitative assessment of the value of a future experience made by the customer is articulated with the quantitative scale of the price proposed by producers. Value creation processes are largely described by the literature of tourism studies, for instance by examining the process of enchantment of the world (Réau and Poupeau, 2007), but these works neglect the question of monetary exchanges in this enchantment or even consider them as incompatible – our position being that tourism is always an economic monetized activity. In order to deal with these questions, this paper proposes a model of Territorial Economic Transactions (TETs) which displays the following features and ambitions to capture the following points: 1 This paper will be published in 2015 in : Lorentzen, A. Schrøder, L. & Topsø Larsen, Karin, Spatial Dynamics in the Experience Economy, London and New York: Routledge 4 Space and time are not only the ‘shape’ generated by TETs. The space- time disjunction between on the one hand the concrete service and on the other hand the knowledge about it is indispensable in order to sell meaning on the top of goods in a post-utilitarian economy. First, there is a time sequence between the customer who develops an anticipated knowledge about the experience and then possibly moves to the place where the experience is lived. Second, the mobility of customers or/and of goods and services across space is also a fundamental component of value construction because places convey meaning for the customer that can be associated with goods and services. Since Tarde (2006 [1901]) and Habermas (1997), social sciences have given an account of the development of the “public space” as medias where meanings are shared. This symbolic scene allows individuals to build their opinion about places, goods and services, initially partly independently of economic transactions. Innovation and value creation today consists precisely in exploiting this custumers’ knowledge by selling associated concrete goods and services and by displaying the associated prices on this symbolic stage. Nevertheless, social sciences in general did not really focus on these transactions. In this paper, the territorial stage is made of a symbolic stage associated with concrete stages where concrete goods and services are delivered. This model provides a general understanding of all the economic transactions that embody meanings and shows why time and space are at the heart of value creation and monetary transactions. In today’s society, where knowledge about places is more and more shared thanks to new information and communication technologies, TETs are becoming a general model of economic transactions. 5 Part I is dedicated to the contextualisation of this approach in the economic literature, in the literature about the experience economy (EE) and tourism studies. Part II is an extensive presentation of the model of the territorial stage and of TETs. Several examples based on research about the history of Swiss tourism resorts will be presented. Montreux will be used as an illustrative case of the functioning of the model2. In part III the history of this Swiss resort is mobilised on order to show how, through history, territorial transactions developed and got more and more diversified and complex. A typology of territorial transaction is presented, showing how such places create value and generate monetary flows thanks to meanings associated with the attraction of customers (tourists, excursionists, residents) or with the export of goods (water) and services (the Jazz Festival) conveying territorial value. Today, this place is a complex ‘territorial stage’ with high territorial value. On this base, the conclusion suggests a broader validity of this model of territorial value. If touristic and experiential transactions matter more and more for territorial development, those ‘presential’ aspects should also be articulated, positively or negatively, with the more traditional production-based aspects. 2 This frame and results come from a qualitative historical research (analysis of archival documents, press and interviews), a thesis carried out under the Swiss National Science Foundation project « Between Abyss and Metamorphosis: An Interdisciplinary Approach to the Development of Tourist Resorts » (subsidy n°CR11I1_135390, principal applicant Prof. Mathis Stock) 6 1. ECONOMY, EXPERIENCE ECONOMY AND TOURISM Compared to the traditional understanding of mainstream economics, the EE implies a large number of additional elements in order to understand how value is constructed in transactions beyond the question of the utility of goods. Nevertheless, the EE does not fully articulate those elements, especially the question of how time sequences and movements across spaces contribute to value creation. Tourism studies do not deal with economy, but with territorial practices and experiences. Tourism is largely overlapping with the EE but cannot be assimilated to the EE. Here again, issues about time and spatial mobility contribute to value creation. 1.1 The economy and the experience Mainstream economics theorize basic economic transactions as the exchange of a good and a certain quantity of money. This vision implicitly postulates a certain number of things. First, all the properties contributing to the use value for the customer are embodied in the good. Borrowing the terms of Orléan (Orléan & Diaz-Bone, 2013), it is a ‘substance value’.
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